Quality loss program announced

FSA Notice DAP-105 says that farmers who suffered a quality loss of at least 20 percent on their 2000 crop may be eligible for additional payments. Signup dates for the quality loss program have not been set, but should be announced soon.

When Congress passed the 2001 Agricultural Appropriations Act last October, it included provisions for both a crop disaster program and a quality loss program for the 2000 crops. Signup began for the crop disaster portion in late winter, but FSA staff members continued to work on the details for quality losses through the end of May.

Officials said the 2000 crop disaster program already includes quality loss payments for many crops. “However, QLP is a supplemental quality program for those situations where the quality loss payments were inadequate or nonexistent.”

Notice DAP-105 says QLP payments will be based on eligible affected production or the harvested production of a 2000 crop that suffered a minimum of a 20 percent reduction in quality due to an eligible cause of loss.

The affected production may be calculated using the smallest measurable unit for which a grower has records; that is, if a grower produced 100,000 bushels of corn and had a quality loss of at least 20 percent on 15,000 bushels, 15,000 bushels may be eligible for a quality loss payment.

Examples of acceptable records or documentation for losses include:

Grading receipts from a warehouse or licensed grader

Sales receipts providing the grade of the crop

University of other commercial laboratory test results

Sales receipts showing disposition to a secondary market because of poor quality, such as wheat sold for feed.

FSA county offices will calculate QLP payments by multiplying 65 percent of the affected production times 65 percent of the result of the crop disaster program primary market price minus the affected price. FSA personnel will have formulas for calculating the affected price.

The notice says the combined total payments for the QLP and CDP programs are limited to $80,000 per year. The $2.5 million per person gross revenue provision for the 1999 tax year applies to both QLP and CDP payments.

Producers must apply separately for quality loss payments even if they have already signed up for the 2000 crop disaster program.